Hi Darren
I can attempt to answer a couple of your questions.

Question 1

ABTA is essentially a “club” for travel agents and providers. Consumers are protected if the member of ABTA goes bust, not the travel companies (ie airlines, hotels etc). So if your travel agent/provider goes bust then ABTA pick up and complete your booking. They also provide advice and help to the travel industry. ABTA will also monitor members compliance to applicable regulations. ABTA membership is not compulsory though, so consumers should see it almost like a sign of approval and an extra level of protection.

The opposite of this is the ATOL bond. Basically this means that the travel agent/provider has put up a large bond, protecting consumers in the event of a failure of the travel company (airline etc). If a booking is a package holiday (ie air element + other element like hotel/car hire etc) then by law it should be protected with an ATOL.

So ATOL = protection for your holiday ABTA = protection for your travel agent

Question 2

Flight only sales cannot be covered under the current regulations, as this covers package holidays. The industry has been lobbying the Govt (CAA) for a charge on all airlines to protect consumers in the event of a failure.

However this has been resisted by the airlines, as they see this as a charge on the profitable airlines to protect those most at risk. If it did come in, many UK airlines may just simply move shop and sell ex UK products to get round this UK only charge, and how would it cover airlines not based in the UK?

Personally I have every sympathy with people that are stranded. When XL went bust I personally gave advice and help to customers that I did not know, and who had not made the booking with me.

But it is buyer beware. All to often people do not know what protection they have, or read the terms and conditions. I ran a recent survey with my subscribers, and 45% of them did not read the T+C when booking a holiday/flight online. After cars and homes, holidays can be the next most expensive purchase in the year, why not make sure you understand the booking conditions, and understand what happens if it goes wrong?

I recently booked a young couple on a flight to Australia, before I booked I asked them if they had their visas. When the answer was no, I told them to get them first and ring me back. The flight had a 100% cancellation, so if they didn’t get the visas for whatever reason, then they would have lost the money. I could have lost the sale, but it is my job to enure that people fully understand what they are buying. All too often people do not take take responsibilty for their actions, and see the internet as a 100% safe place buy from.

Question 3

Holiday prices? I think your guess is as good as mine, personally I think prices will drop in the short term, as contracts as usually done 12 months in advance and unfilled inventory is not sold. But the decline in the £ means that holidays outside the UK will be affected by price. Take US attraction tickets as an example. If a ticket to a theme park costs $100, then this price to the UK has gone from £50 to £65 this year.

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Darren

Question 1

ATOL is requirement for air holidays. If you book a holiday and it is not ATOL then it is not covered. There is no standard to be an ATOL company beyond financial protection.

ABTA /TTA /CPT /PSA Protects non-air holidays. So coach / rail / sea. Also ABTA / TTA protect monies you pay to a travel agent before there due to a tour operator.
(Simply put, you pay £1000 to a travel agent for the balance of your holiday and it not due to the tour operator for another week and the next day the agent goes bust then ABTA / TTA protect that money). The other thing ABTA does is to control the quality of it members and you can only be a member if you come up to that standard.

Question 2

Financial protection for all flights is back by all the consumer bodies CAA / ABTA /TTA / FTO …etc. However the final choice is with the government and after XL crash the government stated again that the industry does such a good job of assisting customers stranded they do not see any political benefit to setting up the scheme. (People against this are airlines as they do not wish to be seen as weak.) The interesting thing is the frame work to do this is already there and the cost would be about £1 per person if set up in the good years, now about £2. There is very little reason not to have it bar the lack of political will.

This will not happen for 2 reasons. First we have already had a recession before since the 70′s and the industry grew after. Secondly People have got used to it and as long as there is a market it will be supplied. However I reckon that we underpay by about 10-20% for travel and this increase that I could see happen.

But even if your turkey holiday went up to £220 Darren would you still go?

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Question 1

Question answered, I think! It is a question of protecting the money all the way down the chain. The ABTA bit indeed covers the money you hand over to the agent – and I want to stress, here, that this applies as much to internet agencies, as it does to the High Street variety – to make sure it gets into the hands of the ATOL tour operator.

It should also be noted that there are alternatives to ABTA, the TTA (see passim) being one of them. At the risk of being shot down in flames, there may be an issue in that the travel trust system, effectively only kicks in as long as the money went in their in the first place. Certainly ABTA is the sort of agency bonding that Harrods would sell.

Question 2

The financial protection on airlines must happen! The most financially insecure way of buying an airline ticket is to give an airline a load of cash. IATA travel agents are bonded, but that bond applies to the airlines making sure they get their money, not the customer. There are not that many profitable airlines about, mind you, Dean.

Whereas I accept your point, it is difficult to work out who is and isn’t profitable. British Airways, even, has it’s problems and who would have expected SABENA or SWISS AIR to go belly up? Surprisingly, credit card companies are ominously silent on this issue (maybe they are under pressure?) If credit card companies say “stuff this for a game of soldiers” – and frankly it is bizarre that they have put up with it so far – then there will be a big problem.

Question 3

As I have often said, there is no right of the Great British Public to cheap holidays. £50 a night for a 3* hotel room, B & B? Ruddy good price I would say. That’s £350. The Devon Court Hotel (small place in Torquay) is £425 a week in high Summer or £378 off season – and that’s a “good price” . Return flight to Turkey – businessmen can pay £400 to fly to Paris and back, so let’s say £250 is a fair, “cheap” price. Coach to hotel Oh! There’s only two of you, taxi to Hotel then – £80 return. That’s £465 a head and you paid how much, Darren? As has been mentioned earlier, if holiday prices get “realistic”……..

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Question 3

I agree with Dean Oliver, short term prices will probably drop due to unsold flight seats & hotel allotments. Marketing will increase a lot. A decline in currency makes outbound travelling more expensive but also easier to attract inbound tourism from countries whose currency is stable.

My guessing is that not many operators choose to raise their prices in a recession. There are a number of options to maintain business as usual. Longterm, prices will follow the law of supply & demand, why it´s a question about where people will spend their holidays – home or abroad? The industry will adjust accordingly. It might result in more luxury niche companies but also budget alternatives.

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